PEO/ASO Services
Whether you are a small or large growing business, you may often find yourself in a position where you need assistance managing your employment and administrative functions. PEOs (Professional Employer Organizations) and ASOs (Administrative Service Organizations) are available to fill these needs. But before you make a decision to partner with a PEO or an ASO, you need to understand the differences between these types of organizations. What are their strengths and their weaknesses? The answers to these kinds of questions is exactly what the staff at iBusinessSolutions is there to help you understand.
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An ASO is a kind of middleman for administrative services for your company. The ASO you contract with will handle payroll and tax filing for your company, and the paperwork is filed under your federal employer’s identification number. Questions about regulatory compliance will be handled by the ASO you choose. An ASO can offer you assistance with legal questions or matters relating to regulatory compliance but these remain, fundamentally, the client company’s responsibility. The ASO will handle day-to-day administrative matters relating to human resources: all staffing matters and the corollary issues are bundled services in a contract with an ASO. But basically, the ultimate responsibility for insurance coverage, regulatory matters, and safety management remain in the hands of the client company. A very large benefit for assuming this risk comes in the Dividend or Profit sharing programs associated with properly managing your workers comp program. Many companies find this preferable because they retain control and can still be very hands-on without having to handle mundane details on a daily basis
A PEO offers more comprehensive, all-encompassing services to your company. A PEO really takes over every aspect of staffing for your company. All legal responsibility for staffing (handling HR paperwork, tax paperwork, workers compensation matters) is handled by the PEO; in addition, employee benefits, health insurance plans, and regulatory compliance is handled by the PEO. In general, a traditional PEO contract means that all of these benefits are handled by the PEO, under the PEO’s name; the client company is not involved with these matters (though a 401K policy may be offered in the client company’s name). Basically, the PEO takes on all the challenges of administrative functions in addition to the responsibility for the correct implementation of these functions. This requires a high level of trust between the client company and the PEO. For a company that prefers to focus solely on its business operations and does not want to be at all distracted by administrative matters, the PEO is the preferred choice. Some PEOs offer packages in which certain individual functions can be selected and others rejected; for example, the client company can choose to handle health benefit packages for their staff but leave all other matters to the PEO. Overall, however, companies seeking PEO services are happy to let the PEO do everything it can to make the client’s job easier.
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What is a PEO?
What is an ASO?
